Companies that offer software and communications solutions to small and medium-sized businesses (SMBs) often find that it makes sense to team up in order to better serve customers. This trend is becoming more prevalent as the concept of Software-as-a-Service (SaaS (News - Alert)) takes off.

 

Case-in-point: a deal announced Tuesday by NetSuite and HP, in which the two companies are partnering to offer SaaS business apps to the SMB market. HP’s U.S.-based network of 15,000 value-added resellers (VARs) is being tapped to distribute “cloud services” to SMBs.

 

More specifically, HP and NetSuite (News - Alert) have created a referral-based program available to HP’s channel partners, giving them the opportunity to offer new management and implementation services. These are available for NetSuite’s customer relationship management (CRM), enterprise resource management (ERP) and e-commerce solutions, as well as HP’s Total Care portfolio.

 

HP brings to the table its infrastructure technology and channel network, and NetSuite is contributing a hosted SaaS suite geared specifically toward SMBs, along with dedicated support to assist HP resellers in marketing “cloud” solutions. The goal: offer smaller companies an alternative to expensive, on-premise solutions. Given the current economic climate, this type of offering should prove very compelling to SMBs.

 

“SMB customers are looking for new ways to avoid up-front technology costs, and on-demand services are the ideal solution,” said Enrique Lores, senior vice president of HP’s solution partnership organization and commercial sales operations, in a statement. “Our partnership with NetSuite offers the HP channel network an excellent method for participating in this growing SMB market opportunity. They will now have access to the tools they need to stay at the forefront of technology with new ways to deliver outstanding service to their SMB customers.”

 

Zach Nelson (News - Alert), NetSuite’s CEO, noted that the partnership benefits his company by helping it accelerate penetration into the SMB market.

 

This partnership represents an expansion of VAR offerings to include not only hardware but SaaS products as well — in keeping with the current trend in which the developing “cloud” market necessitates using a mixture of on-premise and hosted solutions that fit into SMB budgets and goals.

 

The HP-NetSuite strategy makes a lot of sense given current conditions and developments in the business software/services market.

 

“The trend toward services delivery by channel partners has been marked in the last several years, and it will only continue to increase,” IDC (News - Alert) analyst Christina Richmond said in a statement. “Partners must evolve toward a more solution-centric approach gradually, while maintaining their core hardware competencies. This offering from HP goes a long way toward enabling partners to easily incorporate hardware, software and services which, as a solution, will assist the channel in taking the necessary steps to transform their business models for the future.”

 

NetSuite’s offerings also contribute a compelling opportunity for resellers serving SMBs. Research firm AMI Partners recently noted that 62 percent of midsized businesses view CRM as strategically important, but only 14 percent have actually implemented such solutions. Why? Limited resources and slow return on investment for traditional, on-premise offerings often are a deterrent.

 

Likewise, 64 percent of midsize companies understand that ERP is important, but only 16 percent have implemented such systems.

 

By combining HP’s infrastructure and resellers with NetSuite’s SaaS suite, these two companies are well on their way to giving SMBs what they need but has traditionally been out of reach: affordable business software solutions without prohibitive overhead costs.